Michael T. Cappucci is Senior Vice President at Harvard Management Company. This post is based on a recent paper by Mr. Cappucci. Related research from the Program on Corporate Governance includes Social Responsibility Resolutions by Scott Hirst (discussed on the Forum here).
If investment managers followed the old saying “whatever is worth doing is worth doing well,” then more would have best‐in‐class environmental, social and governance (ESG) programs. It used to be that asset owners could identify which investment managers “got” ESG investing principles simply by asking whether they had a written ESG policy. Today, most investment managers have something to say about ESG issues, and written ESG policies are becoming ubiquitous. Yet, as anyone who has ever looked at investment managers’ ESG policies can attest, the existence of a written document is not a reliable indicator of a firm’s commitment to or performance on sustainable long‐term goals.